Retailers Descend on Mexico

woman with shopping bags and credit cardWall Street Journal, 5/29/2013

Clothing retailers from the U.S. and Europe are trying Mexico on for size. Since September, retailers including Gap Inc., Sweden’s Hennes & Mauritz AB, American Eagle Outfitters Inc. and Forever 21 Inc. have opened stand-alone stores in Mexico. The new arrivals aim to compete for an enviable niche carved by Spain’s Inditex SA, operator of Zara, which first set up shop in Mexico in 1992 and now has more than 246 stores here.

On a recent weekday at the mall in Mexico City’s upscale Santa Fe area, 20-year-old law student Ana Sierra was scouring the racks at H&M. Holding a blouse that retailed for the equivalent of $8, Ms. Sierra said she and two friends had traveled more than an hour from the opposite end of the city to shop at the store. “We are already tired of the same options,” Ms. Sierra said, praising H&M for its variety and affordability. Analysts say these new entries have contributed to weaker sales growth in recent months at the country’s largest retailer, Wal-Mart Stores Inc.’s local unit Wal-Mart de México SAB, as consumers trade up to fancier shopping experiences and department stores offer varied credit options.

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